By Jonathan Watson

        Confidence seems to have been the buzzword in the last 24 hours. Firstly the CBI – Confederation of British Industry - survey of business confidence showed that retail sales had risen at their fastest pace in three years for June to July. They could have been boosted by the World Cup, but it is still money being spent in our economy reflecting the continuing and encouraging growth the UK is experiencing.

We then had a report from the US Conference Board who conducted a survey of consumers and noted that confidence was at a low not seen since February, as reflected by the US dollar’s weakest positioning since Fenruary.

New Zealand Business Confidence figures released today by the National Bank of New Zealand show that there is also reduced confidence there, down at quite an alarming rate.

In europe confidence is up following the stress test results which by and large showed that the european financial market can handle the pressures placed upon it.

I think the key thing is the reduced US confidence and increased euro confidence. This is because the euro debt default and contagion risk had been a huge weight on europes shoulders that some stated threatened the very existence of the euro! Now that this fear has been aleviated it has helped not only the euro but many other currencies as investors move away from ‘flight to quality’ or ‘safety’ currencies (like the US dollar or in commodities gold) and into other options. The Australian dollar and the Kiwi dollar had recently benefited from this.

We see a lot of GBPEUR activity and think todays German CPI (Consumer Price Index) Inflation data could help strengthen the euro. Those with immediate requirements may wish to consider their options before this comes out, the time of which for release has not yet been confirmed.

To discuss further or find out more about any of the issues discussed here, please get in touch via the contact form. As specialist currency traders, we will be happy to discuss the market and how we can assist in securing award winning rates.